Best time to buy in decades

The decision by the Monetary Policy Committee (MPC) of the Reserve Bank to cut the repo rate by 25 basis points to 6.50% (reducing the base mortgage lending rate to 10%) is welcome news and brings some relief to consumers, bond holders and home buyers.

It has been a tough year with rising costs and a weak economic and growth climate. The interest rate cut, the first since March 2018, is therefore a welcome reprieve of some of the economic pressure faced by consumers. It should provide some added saving to their household budgets and will also make property a little more affordable.

We hope this is just what buyers need to start flooding back to the market as we have not yet seen the kind of uptick in sales that was expected following the elections. The result is that conditions have improved further for buyers.

As a result of the sluggish conditions, stock levels are up considerably while prices have remained flat and are coming down in many instances. At the same time, sellers are now negotiating. The bank mortgage loan granting rate and turnaround times have continued to improve and there is now a huge opportunity in the market for buyers.

People often talk about timing the market, and while you can only do this with hindsight, the current buying conditions are certainly some of the best for buyers in decades. The market seems to be in a similar phase to the 1992-1993 period, just before the 1994 elections when there was a great deal of hesitation.

Right now though, the interest rate is considerably lower. Those who bought during that 1992/3-lull will tell you that they bought at just the right time and have benefited greatly from capital value growth.

For buyers in a position to buy right now or wanting to upgrade, it is an ideal time to take advantage of the opportunities in the market. It is a good time to start shopping around ahead of the new school and university year and you are likely to find a willing seller and can negotiate, but don't wait too long, the window of opportunity may not last.

Samuel Seeff

Chairman, Seeff

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